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Fixed export costs and multi-product firms

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  • Roger Smeets
  • Harold Creusen

Abstract

This paper has two aims. First, we uncover some salient components of fixed export costs, which play a crucial role in recent heterogeneous firms models of international trade. Second, we investigate whether the importance of these fixed export costs varies with the size of a firm’s export product portfolio. We find that a destination country’s institutional quality, such as the quality of regulation or the extent of corruption, form important impediments to a firm’s export decision, lowering the export probability to up to 10%-points. Moreover, relative to single-product firms, multi-product firms experience additional export probability decreases of around 2%-points.

Suggested Citation

  • Roger Smeets & Harold Creusen, 2011. "Fixed export costs and multi-product firms," CPB Discussion Paper 188, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:discus:188
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    References listed on IDEAS

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    Cited by:

    1. M. Padmaja & Subash Sasidharan, 2017. "Sunk Costs, Firm Heterogeneity, Export Market Entry and Exit: Evidence from India," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 15(2), pages 367-393, June.
    2. Niklas Potrafke, 2015. "The Evidence on Globalisation," The World Economy, Wiley Blackwell, vol. 38(3), pages 509-552, March.
    3. Arjan Lejour, 2015. "The Duration of Dutch Export Relations: Decomposing Firm, Country and Product Characteristics," De Economist, Springer, vol. 163(2), pages 155-176, June.
    4. Jeong, Jaehoon & Yang, Jae-Suk, 2023. "Why do some firms stop exporting?," International Business Review, Elsevier, vol. 32(4).

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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements

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